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Stock Strategist Industry Reports

The Packaged Food Industry: Nothing to Feast On

We contend that this sector isn't attractively valued right now.

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Consumer behavior has changed rapidly throughout this global economic slowdown, affecting both discretionary spending, as well as consumers' purchases of everyday staples such as food. That said, we still believe there are some names in this space that are worthy of investors' attention. In this article, we'll take a brief look at the current dynamics of the packaged food space, and review our top two picks.

Savvy Consumers Seek to Save Money
With continued uncertainty surrounding today's economic environment, cash-strapped consumers have been adjusting their shopping behaviors in an effort to rein in their spending. For example, consumers are increasingly opting for lower-priced private-label (nonbranded and store-branded) alternatives or value-branded goods, as shown in the chart below.

Erin Lash does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.